May 23, 2013

A man previously accused of defrauding a Granite Bay woman of more than $7 million has been indicted in connection with a second scheme, this one involving a Pennsylvania financial manager.

A federal grand jury in Sacramento today returned a 20-count superseding indictment charging Troy Stratos, 47, formerly of Los Angeles, with three counts of mail fraud, 12 counts of wire fraud, four counts of money laundering and one count of obstruction of justice, according to a federal Department of Justice news release.

In December 2011, Stratos was indicted for mail fraud, wire fraud, money laundering and obstruction of justice in relation to a scheme to defraud a Granite Bay woman of more than $7 million. The superseding indictment includes all the charges in the original indictment and adds four counts of wire fraud and two counts of money laundering relating to a different scheme to defraud a financial manager of $11.25 million in client funds, officials said.

The first indictment alleged that Stratos defrauded the Granite Bay woman of at least $7 million by convincing her that he would manage the proceeds of her divorce by investing them overseas, where they would earn a high rate of return. He represented himself as being wealthy and successful, and involved in the entertainment industry.

At Stratos' request and instruction, the woman executed a revocable trust with Stratos into which she placed the cash proceeds of her divorce and property. Instead of investing the money as promised, Stratos allegedly diverted substantial sums from the trust for his personal use. He is accused of using portions of the money to pay the woman's expenses, misrepresenting to her that he was spending his own money to pay for her expenses while her assets were invested overseas.

Stratos reportedly claimed that he could sell her Granite Bay house to Middle Eastern royal families but needed to lease luxury automobiles to make the property more enticing. Instead, he lived in the house and made use of the automobiles, authorities said.

The charge of obstruction of justice alleges that in February 2007, when Stratos' bookkeeper was served with a grand jury subpoena, Stratos instructed him not to produce some of the documents covered in the subpoena.

New charges in the superseding indictment allege that beginning in December 2010, Stratos, using a false name, defrauded a Pennsylvania financial manager of at least $11.25 million.

Stratos allegedly claimed that he could broker the sale of up to 40 million shares of Facebook stock prior to Facebook's initial public offering. Stratos allegedly indicated that he represented Mexican billionaire Carlos Slim, one of the wealthiest people in the world, and that Slim was going to purchase a large block of Facebook stock at a very favorable price through a company called "Soumaya Securities." Stratos allegedly told the investor that there were more shares available than Slim wanted and that other people were going to purchase the excess. Stratos offered to include the investor in the deal to purchase the excess shares.

The investor agreed to purchase the shares and to pay Stratos for facilitating the deal. Between April and August 2011, the investor gave Stratos $11.25 million toward the purchase of the shares. Stratos allegedly used the money for personal expenses and to pay those who filed claims against him, or who had posted information on the Internet accusing him of fraud.

Authorities said Stratos repeatedly told the investor that the deal would close soon but was being delayed for various reasons, including referring to a fictitious deal involving Steve Jobs, the founder of Google and other Silicon Valley entrepreneurs.

After Stratos was arrested and taken into federal custody on the original indictment in this case, he continued to tell the investor, through text messages and telephone calls, that the deal was real and that he could refund the investor's money. But by this time, authorities said, Stratos had spent nearly all of the $11.25 million.

Stratos remains in custody and is to appear July 23 for a status hearing before U.S. District Judge Lawrence K. Karlton.

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